The past 12-18 hours have been quite scary for many Bitcoin enthusiasts,a s prices plummeted from the US$240 mark all the way down to US$166.45. During this “Bitcoin Flash Crash”, as many speculators are calling the event, a lot of trading has occurred, allowing newcomers and traders to accumulate some very cheap Bitcoins. But is this the big drop before the big gain, or will it continue to be very volatile for the next few days?
Twitter was exploding with people spelling the end of Bitcoin as prices tumbled to the US$200 mark and below this morning. Despite a small bounce back up to nearly US$210 shortly afterwards, it was only a sign of things to come as massive red candles (representing sell orders) appeared on the BitcoinWisdom charts across all exchanges and all fiat currencies.
With nearly 20,000 Bitcoins being sold for US Dollars on the BitFinex exchange, a lot of people started panicking and a massive wave of sell orders across all other exchanges was created. BitStamp, which has recently relaunched after their hot wallet being breached and causing roughly US$5 million in losses, seemed to have a lower amount of panic sales compared to other exchanges.
The same can be said for the BTC-E exchange, as both their USD and EUR markets saw very little effect compared to the “massacre” taking place on BitFinex. In fact, the total amount of Bitcoins sold on BTC-E against the Euro fiat currency is well below 500 so far today. Looks like us Europeans managed to remain calm and hold. Or the BTC-E BTC/EUR market just isn’t that popular, which is also a strong possibility. Oddly enough the BTC Bitcoin/USD exchange rate is still US$10 below other exchanges at this point, so it looks like they have some catching up to do.
However, the main culprit in this “Bitcoin Flash Sale” appear to be the Chinese exchanges, as both Huobi and OKCoin have seen massive spikes in transactions volume during this period. On the Huobi exchange alone, over 25,000 Bitcoin have been sold in a 45-minute spam, between 7:55 AM and 8:40AM (GMT+1). The good news is that buying volume on the Huobi exchange is slowly picking up in a similar fashion.
Exactly the same can be said for the OKCoin exchange, as very big red candles appeared on their exchange’s charts during those 45 minutes as well. And if you do some quick and rough estimates, over 20,000 Bitcoin was sold during that time period as well. You could almost say this was a well-coordinated Bitcoin Flash Crash across the USD and CNY markets on all major exchanges.
BTC China on the other hand kept things relatively balanced. Granted, their charts have an equally large dip just like all the others, but it involved far less Bitcoin volume. Very interesting trend we are seeing here, and all signs point towards a massive market manipulation by “major investors” and “large bagholders”.
As of right now, it looks like we might go for another rollercoaster ride in the next few hours, as all markets see a new batch of red candles appears on the charts. It will be an interesting day for Bitcoin enthusiasts to say the least.